A core function of any banking system is the provision of payments. However, a greater number of non-banks are becoming part of the payments landscape. Payments can be made via fiat or crypto currencies, bank credit or deposits, or funds transfers on the books of non-bank payment providers. Most of...
Carbó, Chakravorti, and Rodriguez study the impact of lowering interchange fees on consumer and merchant adoption and usage along with bank revenues during a ten-year period in Spain using bank-level data. Using cutting-edge econometric techniques, they are able to test two-sided market model predictions about payment card pricing policies. They...
Payment cards continue to replace cash and checks in advanced economies. Along with the growth of payment card transactions has come greater scrutiny by public authorities of certain payment network rules along with the level of certain fees. Chakravorti reviews the growing payment card literature and discusses the impact of...
In this book chapter, Chakravorti considers linkages between consumer payments and credit. Payors, those that make payments, and payees, those that receive payments, choose among various payment instruments based on their preferences toward convenience, risk, and cost. According to a recent U.S. survey, the usage of payment cards is increasing...
Chakravorti and To construct a two-period model to study the interactions among consumers, merchants, and a card issuer. The model yields the following results. First, if the issuer's cost of funds is not too high and the merchant's profit margin is sufficiently high, in every equilibrium of our model the...